CAA urges industry to respond on Atol reform as deadline nears

The CAA has urged Atol holders and industry stakeholders to respond to its ‘Request for further information’ on Atol reform by the end of next week ahead of “potentially the biggest change” to the scheme in its history.

Speaking on a Travel Weekly Future of Travel webcast, CAA head of Atol Michael Budge insisted: “We’re clear that changes need to be made.”

He said: “For some Atol holders this may mean having to look closely at how they use customer money. We’ve indicated some form of segregation of funds is our preferred option.”

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But he insisted: “No final decision has been made.”

Budge acknowledged the proposals could amount to “potentially the biggest change to the Atol scheme in its 50-year history” but said: “It depends upon the final proposals.”

He argued: “We believe there is a case for reform. We’ve proposed a number of different changes around the licensing framework and the framework by which businesses might directly protect the monies they hold from customers, as well as changes to the Atol Protection Contribution [APC] rate.

“It’s important we consider what is right for the industry as it continues to evolve. Potentially, it could be considered a substantive change from how the industry has grown up.”

But Budge added: “As regulator of a dynamic industry it’s important we keep our areas of regulatory focus under review and identify where improvements can be made.

“At the core of our proposals is an objective to increase the financial resilience not only of the scheme, but also of the wider travel industry for the benefit of consumers.”

Budge noted: “The responses to our first consultation [in 2021] indicated there was a consensus that some change to the Atol scheme was necessary and that included a change to the current APC rate.

“Our latest document requests additional information, but also provides an update on our thinking. Hopefully, it provides clarity on some matters. It asks some focused questions around issues raised with us, as well as providing an opportunity to comment on our approach.

“This is an opportunity for stakeholders to have their say as we look to develop the final proposals.”

He said: “We recognise that businesses in the travel sector have different structures, different ways of operating. We need to bring together these differing views and identify a way we can make changes that are viable across the sector, recognising the diversity.”

Budge added: “We know there are questions around the implementation date and transition. That is why we signalled our intent to introduce changes potentially from April 2024. We recognise the need for a transition period and time for businesses to adjust.”

He insisted: “No decision has been made. We want to hear all perspectives to help us get the reform right.

“I urge everyone who has yet to submit their views to do so by the closing date of March 24. We’ll be taking careful consideration of all the views presented to us.”

Register interest in attending Travel Weekly’s Future of Travel Conference in September here.

MoreSpecial Report: CAA asserts case for change on Atol

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Analysis: The key points of the CAA’s Atol Reform update

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